Benefits of investing in Equity Mutual Funds

[Kanika Shelatkar]

The investment market is filled with opportunities. Investors can choose from a range of securities that let them reach their financial goals over specific investment horizons. For most investors, Mutual Funds remain their preferred investment. Among the different Mutual Funds, Equity Mutual Funds are a popular choice. They typically aim to generate higher returns for investors.

The fund manager invests in company shares with different market capitalisation. Here are a few benefits of investing in them:

Professionally managed
It is best to invest in securities managed by experts in the field when it comes to Share Markets. The best part about Equity Funds is they are managed by professional fund managers who know everything about the investment market. Such managers study the market daily and make investments by predicting market fluctuations. They also refer to real-time data and performance reports of funds before making any investment decisions.

As such, be rest assured that your money is safe when a fund gets managed by a reputed, professional fund manager.

Leads to capital appreciation
The primary reason investors prefer to invest in Equities is they appreciate the capital invested. They are those rare funds that provide returns that beat inflation. As it happens in the Stock Market, if the stock price rises, it automatically results in capital appreciation. If you make well-informed investment decisions over time, you can create a good corpus by strategically investing in Equity Funds.

Benefit from portfolio diversification
A diversified portfolio is crucial to mitigate the risks associated with Share Market Investments. This is a great benefit offered by Equity Mutual Funds. By investing in Equities, you spread your investments in different sectors, reducing the risks associated with losses on investments.

Due to market volatility and under-performance, the out-perform stocks make up for losses incurred by the under-performers. This minimises market risks and losses in your overall investment portfolio.

Liquidates investments
The best part about Mutual Fund Investments is they get liquidated easily. Since Equity Funds fall under the general category, this liquidity benefit is also associated with them. You quickly get back your corpus in your Savings Account when you invest in Equity Funds. It is possible to redeem them partially or wholly anytime, especially when facing financial emergencies.

Moreover, you use the SIP calculator to understand the returns through the investment, which you can stop anytime. Pre-term investments get credited in a week, while matured funds are deposited within three days.

Equity Funds produce higher and better returns. However, the returns earned by investors largely depend on the company's performance. Since these funds can provide higher returns, most investors prefer investing in them. However, such funds are ideal for investors with medium-to-high investment appetites. If you consider yourself a conservative investor, stick to investing in Debt Funds.

https://www.miraeassetmf.co.in/mutual-fund-scheme/equity-fund